Case Digest (G.R. No. 151319)
Facts:
In 1984–1987, Pedro L. Linsangan agreed with Florencia C. Baluyot, an Agency Manager of Manila Memorial Park Cemetery, Inc. (MMPCI), for the purchase of a lot; Baluyot promised that Linsangan would pay the original price of P95,000 while she would shoulder the difference when MMPCI issued Contract No. 28660 showing a list price of P132,250, and Linsangan paid P19,838 and issued postdated checks. Linsangan sued MMPCI for breach after the contract was cancelled for alleged arrearages; the Regional Trial Court and the Court of Appeals held MMPCI jointly liable with Baluyot, prompting MMPCI's petition to the Supreme Court.
Issues:
- Was MMPCI bound by Baluyot’s promise to sell at P95,000 such that MMPCI is liable to Linsangan?
- Was Contract No. 28660 validly entered into and validly cancelled for arrearages?
- Did MMPCI tacitly ratify Baluyot’s unauthorized agreement or are there grounds for estoppel against MMPCI?
Ruling:
The Court GRANTED the petition, REVERSED and SET ASIDE the decisions of the Court of Appeals and the RTC, and DISMISSED the Complaint for lack of cause of action. The Court held that MMPCI was not liable for Baluyot’s separate agreement and that Linsangan’s remedy lies against Baluyot alone.
Ratio:
The Court found that Baluyot’s authority was limited to soliciting and remitting offers on MMPCI forms, and that the signed Offer to Purchase showing P132,250 and accepted by an authorized officer bound MMPCI; extraneous promises by Baluyot were outside her authority and were not shown to have been ratified by MMPCI. There was no evidence that MMPCI had knowledge of or tacitly accepted Baluyot’s arrangement, and Linsangan failed to exercise the requisite inquiry into the scope of the agent’s authority; Baluyot’s own admissions showed her failure to pay the agreed share, causing arrearages that justified cancellation.
Doctrine:
- Agency binds a principal only within the agent’s actual authority, express or implied.
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